The five-day sale was held at the American Numismatic Association (ANA)National Money Show in Dallas - click here for news of the corresponding US coins auction.

The Fairbanks note was predicted as the top lot of the sale from the outset, having been owned by Charles Fairbanks (1852-1918), a senatorwho would go on to become vice president to Theodore Roosevelt.

Fairbanks' grandson was concerned about the note's safety in his home

The Alaskan town of Fairbanks was named after the senator following his successful resolution of the territorial dispute between the US and Canada. After the Klondike Gold Rush of the 1890s, the town then grew to be Alaska's second largest city.

The First National Bank of Fairbanks was licensed to issue currency in 1901. The 1902 Red Seal notes were the first to be circulated, and the present example was the third note to be issued from the very first sheet.

Bearing serial number one, which is highly coveted throughout banknote collecting, the $5 is one of just two notes from that first sheet to have survived - no examples of the $10 or $20 notes have yet been discovered.

It was presented to Charles Fairbanks himself and consigned to the auction by his 66 year old grandson who, according to Heritage Auctions, had recently learned that the note had risen in value from around $50,000-60,000 in the mid-1990s. It sold for $246,500 at the auction, sitting comfortably within its $200,000-300,000 estimate.